On June 29, 2001, the Environmental Protection Agency (EPA) Office
of Water submitted a draft proposed rule titled "Federal Water Quality
Standards for Indian Country and Other Provisions Regarding Federal
Water Quality Standards" to the Office of Management and Budget
(OMB) for review under Executive Order No. 12866. This proposed
rule would establish Federal water quality standards for all Tribal
waters except those already covered by EPA-approved Tribal standards,
and those for which a Tribe requests deferred application of the
Federal standards on the grounds that the Tribe will develop its
own standards "within a reasonable period of time."

Water quality standards are one of the fundamental tools provided
by the Clean Water Act to restore and maintain the chemical, physical,
and biological integrity of the Nation's waters. The Act provides
for States and Tribes to adopt such standards, generally on a waterbody,
watershed, or ecoregion specific basis, and for EPA to review and
approve (or disapprove) these standards. The Office of Information
and Regulatory Affairs (OIRA) recognizes the fundamental role played
by water quality standards under the Act, and supports EPA's on-going
efforts to speed the pace of Tribal adoption of such standards.
However, we have several concerns with the draft proposed rule that
has been submitted for our review and believe it could be improved
by further analysis and consultation with stakeholders, particularly
States and Tribes.

The rule would establish a protective use designation and numeric
criteria for over 100 specific pollutants, which would apply to
"as much land area as all of New England plus the State of New Jersey"
(Draft Preamble, p 13). No quantitative analysis of the
costs and benefits that would result from this action is provided.
We understand that EPA believes the cost impacts of the rule would
be minimal, but are concerned with the limited analytical basis
provided for this conclusion. We note that the preamble identifies
nearly 300 point sources on Tribal lands that would be directly
affected by the rule. In addition, there may be substantial numbers
of non-point sources, and point sources upstream of Tribal lands,
that could also be affected. There may also be significant costs
associated with developing and implementing Total Maximum Daily
Loads that could be required as a result of the rule. We believe
the rule would benefit from further analysis of these costs, in
order to support informed public comment, before it is published
as a formal proposal. It would also be helpful to see additional
analysis of the benefits of the rule, including quantitative analysis
where possible.

We are further concerned with the Agency's conclusion that the proposed
rule does not have Federalism implications. We note that the rule
would create pockets within virtually every State to which the new
Federal water quality standards would apply. This will impose on
each State an obligation to ensure that all permits for upstream
dischargers are protective of these standards. However, the rule
does not appear to contain any requirement for consultation with
States prior to a determination by the Regional Administrator (RA)
regarding exactly which uses and numeric criteria will apply to
specific Tribal waters. While the preamble does indicate that EPA
intends to consult with adjacent States "as appropriate," this appears
to be limited to situations where it is necessary to identify which
standards are applicable to waterbodies of these States. There is
no discussion of consultation regarding the impacts of the RA's
determinations on State permitting activities in upstream waters.
OIRA believes these impacts are likely to be significant, at least
in some cases, and that States are likely to be concerned about
them. We are also concerned that the rule appears to establish for
the first time EPA jurisdiction over waters whose Indian country
status is in dispute. We expect that States may also have concerns
over this provision. We do recognize that EPA has provided several
opportunities for State input during the development of the draft
rule, but believe that the rule could be improved by additional
consultation with States. Such consultation will also make it more
likely that the rule will be favorably received by States when published
as a formal proposal.

As a result of the concerns stated above, I am returning the draft
proposed rule on Federal Water Quality Standards for Indian Country
to the Agency for further consideration and analysis. This effort
should include additional consultation with States and Tribes, and
further analysis of costs and benefits. One option that the Agency
may wish to consider would be to publish an Advanced Notice of Proposed
Rulemaking to solicit comment from a range of stakeholders on the
concepts embodied in the draft proposal, as well as on alternate
approaches for promoting coverage of Tribal lands by appropriate
water quality standards. My staff is available for further discussion
with you regarding the concerns that have been raised, and stands
ready to work with you to improve the analysis of this important
rule making.

Sincerely,

/s/

John D. Graham
Administrator
Office of Information and Regulatory Affairs